Evidence of meeting #158 for Canadian Heritage in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was ticketmaster.
A recording is available from Parliament.
5:05 p.m.
Liberal
5:05 p.m.
NDP
Pierre Nantel NDP Longueuil—Saint-Hubert, QC
Thank you very much, Mr. Kumagai and Ms. Moore.
Madam Moore, I think your background as described in our documentation here explains why you brought up an interesting artist's point of view, talking about resale rights. I think it's not that simple, but I also appreciate the fact that since we're at the heritage committee, we always have to see it first from the artist's, creator's and rights holder's point of view.
What seizes me now is that since we see it from the artist's point of view, as Mr. Kumagai says, I think that everybody involved in this ecosystem of artistic creation, of publishing, of show producing is taking risks. The artists take the risk of not being at work in some regular job, hoping to finally get to meet their audience and make piles of money if they're super lucky, and just make an average living, or like most artists, have to work a job on the side. The producers risk that they think this person has talent and they're going to produce their record or their show. I'm not sure, but I guess Massey Hall also produces shows sometimes.
Sometimes you just buy the show and offer the venue. Sometimes you produce the show and everybody involved in this situation is taking a risk. Even the consumers are taking a risk because they say they don't know about the artist's next album, but they loved the previous album and they hope it will be a great show, and then the artist sings all new songs and none of their classic stuff and people are disappointed. So everybody's taking a risk.
The one damn organization that's not taking a single risk here is these ticket resale hubs. Worst of all is they are making billions of dollars tax-free. I can't wait to see the study we'll have on this. If there is any income tax, it's going to be paid in the States.
My concern is that it's okay, it's human to think you're going to buy this and you think you can resell it for a profit. I did it with an MGB, and I did it with a collector's edition of Mr. Potato Head, and it's still in my basement, still wrapped. I bought it 12 years ago. Is anybody interested?
5:05 p.m.
NDP
Pierre Nantel NDP Longueuil—Saint-Hubert, QC
Still, if suddenly all the old folks like me go to toy stores and buy limited editions of stuff and no kids can play, it's uncool. It's an individual thing, but if it becomes standardized by some company, what does it give us as a country to have an opportunistic company come in here and say there's a percentage on every transaction? Maybe they are robots.
To me, in the music scene, the arts scene, everybody's taking risks, even the government. I think you were right to read these comments from frustrated customers, because they are not customers. They are fans. On that aspect, we're into heritage.
Wouldn't you agree that the first thing to do, besides creating new regulations on these international...is first of all, respect the Income Tax Act. If I want to work in the States, I'll have to have a work permit of some sort. Wouldn't the first thing be to make sure these companies act legally? I don't know your perception of Ticketmaster, but at least they're Canadians, and if I'm not mistaken, they're in the market. They wouldn't be if there was no U.S.-based StubHub. Wouldn't you say that the first thing to do is to take responsibility and ask these guys to at least declare the sales they make in our country?
5:05 p.m.
Director of Programming, Corporation of Massey Hall and Roy Thomson Hall
I certainly can't speak to the tax practices of some of those companies. I know some are multinational, with offices here. Some are based externally. I would assume that companies like Ticketmaster are paying their taxes appropriately in Canada.
5:05 p.m.
Director of Programming, Corporation of Massey Hall and Roy Thomson Hall
Where you start to see a lot of the erosion of that tax base and a lot of activity moving elsewhere are at the smaller brokerages and the companies that are in.... You'll find them in Rochester, or in the Czech Republic or in Brazil. They're all over the world. They're everywhere.
In the reality of an Internet economy, it's very difficult to do anything to prevent or track sales. As a locally based industry in Canada, all of us as responsible operators do what we can to keep the activity here. I'm not sure what I could offer up in terms of recommendations to the government for resolving that issue around taxation.
5:10 p.m.
NDP
Pierre Nantel NDP Longueuil—Saint-Hubert, QC
Can I ask you this? We've learned through this study that many provinces have taken initiatives. Just the fact that they are selling their tickets in U.S. dollars is totally against the law. Am I right to say that?
5:10 p.m.
Director of Programming, Corporation of Massey Hall and Roy Thomson Hall
I'm not a lawyer, so I wouldn't be able to comment on it.
5:10 p.m.
Adjunct Professor, Music Technology and Digital Media, Faculty of Music, University of Toronto, As an Individual
I don't know.
5:10 p.m.
Director of Programming, Corporation of Massey Hall and Roy Thomson Hall
I think it's deceptive, certainly.
5:10 p.m.
NDP
Pierre Nantel NDP Longueuil—Saint-Hubert, QC
—because they should know.
If I'm not mistaken, it's a bilingual country. All of these websites just started to be in French. I think StubHub just started, and it's been in business for 12 or 13 years. Are you under the impression that we could do something to make sure that, for example, Ontario's regulations are respected? What would it be?
5:10 p.m.
Adjunct Professor, Music Technology and Digital Media, Faculty of Music, University of Toronto, As an Individual
Again, I can't speak to the tax situation, but I think technology might be helpful here. If technology could be as fast as the so-called bots that buy tickets to keep scanning these sites, that $6,300 Raptors ticket goes away. We know that sale went through StubHub, to at least get an idea of what.... When tickets disappear, the assumption is that they're sold. Tally that up, in more or less real time, and say to StubHub, a public company that has to answer to shareholders, “By tracking your sales, we say that your business in Canada is this amount, and therefore, we are going to levy this tax.”
Collect the data. Don't wait for them to give you the data, because they won't, unless you make them. Then you have to verify it.
5:10 p.m.
Liberal
The Chair Liberal Julie Dabrusin
Okay. Thank you very much.
We'll now go to Mr. Hogg, for seven minutes.
May 14th, 2019 / 5:10 p.m.
Liberal
Gordie Hogg Liberal South Surrey—White Rock, BC
Well, thank you. After hearing this testimony, and testimony from so many others, I am ever more confused than I was when I started. I tried to think of what values we're trying to reflect. In the testimony we've heard over a long period of time—I don't know how many witnesses we've heard from—there's great variance in the values being reflected.
Some were talking about ensuring we have an open marketplace, with supply and demand organizing it, and wanting value for artists and fans, Canadian content and revenue to Canada. Tickets should remain the property of the customer or the owner. Internet sales are important. How do you keep yours safe, and authenticate them? Those are the values I've heard reflected, but the problem, I think, is focused around the sales of tickets that don't exist: the fraud and holdbacks perhaps creating a false marketplace. It is a marketplace that, with the Internet, is broadly expanding to places we can't even anticipate at this time, and bots are a challenge within that.
Given those values and problems, and that the practices we've implemented so far are minimal, I'm not sure what the solutions are. Some of the solutions suggested have been selling the right ticket for the right price, whatever that means, bot legislation and enforcement, simple resales and not holdbacks.
There were attempts from Ontario, which was going to put a cap on prices. I think the newly elected government has withdrawn all that legislation so that there's no cap. They seemed to see that as a solution. Quebec and B.C. have implemented some things.
Given that context—and you've given one example of strategies we could look at, which include tracking sellers' sales and taxation—do you have any specifics and answers we could be turning to? Given the wide range of testimony we've heard—and we're getting close to the end of that—and some of the values you're reflecting, and that we've heard, where does that lead us, in terms of practices and legislation? We've taken this on, and with the stories you've told, and the challenges there, I'm pretty confused. I'd like you to enlighten me.
5:15 p.m.
Director of Programming, Corporation of Massey Hall and Roy Thomson Hall
Perhaps I could offer some thoughts.
One of the recommendations I brought forward, which echos what my peer here had to say, is investment in technology. As I said, this is a global problem. It's a problem that's trying to be addressed by the private sector and governments around the world.
We're moving in the right direction. You can compare with other industries. If you take a look at the airline industry, you don't have a problem of transferability of tickets, because there are safeguards in place to prevent you from doing that. I could not buy an airline ticket and sell it to somebody else and have that individual get on the airplane and travel. One of the issues for us in the concert industry is that we're trying to process a lot of humans into a very small space in a very short amount of time. For anybody who is lined up to go through a check-in at the airport, it would simply be impractical if I were doing it in a 2,500 capacity concert hall.
However, we're getting there. Technology is moving forward. Various biometric tools and a variety of different things are improving our ability to provide some technological controls over what happens with a ticket after it leaves our system. That addresses a lot of the concerns. It addresses the customer service concerns. It addresses the transferability. There are a number of positives that come with it. The technology is just not quite there yet or hasn't been implemented sufficiently. I prefer those sorts of solutions rather than the legislated ones for some of the reasons I discussed earlier.
For example, some of the values we've heard about and some of the things that have just been referenced would suggest you might want to influence what people can sell tickets for, and have a much heavier hand in controlling that side of the world. Again, at least in my world, this really does all go back to the artist and the artist's intentions. I'll remind the committee that for the popular music world in Canada, we are certainly host to a lot of international artists coming through. Even many of our own artists are represented internationally by management, booking agents and others.
At the same time, they're trying to come up with their own solutions to these problems. They're implementing them on a tour-wide basis. You have some artists like Adele or Mumford & Sons, very popular artists who are very much in control of their ticketing world. They have very specific demands for how their ticketing rolls out and what they do to curb the secondary market.
I'm of the belief that if we as a country or as a series of provinces and territories start legislating too much, restricting control over who, what, where and when of the ticketing industry, that will alienate some of those international artists, maybe limiting the number of times they'll come to Canada, limiting the number of cities they'll perform in. Those artists, in many ways, including a number of our own domestic artists, are responsible for an incredible amount of economic impact. I would just caution us against going too far.
5:15 p.m.
Liberal
Gordie Hogg Liberal South Surrey—White Rock, BC
You referenced some artists that have managed things extremely well. Mr. Shields referenced the Garth Brooks method of solving the issues in Alberta. You say to invest in technology, which sounds like a wonderful idea, even though technology is not there. Are you suggesting that government should invest in technology? Where do you think that investment should come from and who should be managing that?
5:15 p.m.
Director of Programming, Corporation of Massey Hall and Roy Thomson Hall
I could see it very easily as a public-private partnership. The problem is so grand that... The larger companies—and I'm sure the representatives from Ticketmaster may have mentioned this—make a considerable investment in technologies to combat this issue. Then there are companies like mine, a charitable non-profit, where we simply do not have the resources to advance that kind of initiative. We have the subject-matter expertise, but we need partnerships and assistance in funding that. I see it as a collaborative effort, something on a larger scale that addresses the issue. There are a million different ways to approach it.
5:15 p.m.
Liberal
5:15 p.m.
Conservative
Martin Shields Conservative Bow River, AB
Thank you, Madam Chair.
I appreciate your being here as witnesses today. I'm somewhat like Mr. Hogg. We've heard a lot of different opinions and questions like, where do we go with this? When you get more witnesses, you hear it all. However, I heard a couple of different things today, which was great. One of them was the slow ticketing concept you mentioned.
I remember when governments got involved with gambling and slot machines. One of the things they did was to slow down the machines, so people couldn't spend money so fast. They really knew how fast to run those machines. You talked about that concept. Could you touch on it again?
5:20 p.m.
Adjunct Professor, Music Technology and Digital Media, Faculty of Music, University of Toronto, As an Individual
Sure. It's partly what Garth Brooks does and what Adele does. It's a type of holding back of tickets. That's where it gets complicated, because as we talked about before, holding back tickets is artificial. It means that whoever is selling the tickets can control who gets priority in buying tickets. Sometimes this is fan clubs, so if you're a member of the Taylor Swift fan club, you get further up in the queue to buy tickets. If you buy her album, you get further up in the queue to buy tickets. There isn't a guarantee that you will get the ticket, but you move further up in the queue.
Sometimes it's with a sponsor. A lot of live events have sponsors, whether it's a bank, for instance, or whether it's a credit card company that, if you hold a credit card, you can sometimes get an advance purchase. It's a way to have windows and phases of ticket purchase before it's just this free-for-all and every single ticket goes out into the world, because that's when the bots can sweep them up from the world.
5:20 p.m.
Director of Programming, Corporation of Massey Hall and Roy Thomson Hall
If you don't mind my adding to that, in terms of a lot of those pre-sale programs, fan club activities and so on, some have certain requirements to participate. Some do not. Some are simply a matter of liking something on Facebook, and you'll automatically get a code for the pre-sale. The industry views it as a marketing tool. It's a free way of reaching a great number of fans, and in many cases, such as an artist's pre-sale, reaching the most dedicated fans who that artist already has a relationship with and prioritizing them. The artists themselves have a vested interested in seeing those programs continue, and again, there's international pressure on that as well.
5:20 p.m.
Conservative
Martin Shields Conservative Bow River, AB
Great.
Sir, when you listed recommendations, you mentioned investing in a national awareness campaign. I find that concept interesting. Would you like to expand on it a bit?
5:20 p.m.
Director of Programming, Corporation of Massey Hall and Roy Thomson Hall
Absolutely. There's so much misinformation surrounding this subject matter. I can't remember whether it was the province or the federal government that ran a consumer feedback poll on the ticketing question and saw record numbers of responses.
However, as I hope was demonstrated by some of what I shared with you, part of the problem is that a lot of the fans out there want to buy an official ticket from the primary source and there are a number of obstacles that get in their way to doing so.
It's a simple matter of educating the public that will address a lot of the concerns that exist here. We know when we receive patron complaints for a variety of purposes, oftentimes we're accused. They say they went to our website and bought a ticket and it turned out to be in American funds, and how dare we do this, and so on. It takes us a while to be able to get them to calm down enough to hear us and let us demonstrate that they actually bought from someone posing as our box office.
If you search on Google for Massey Hall tickets, you will probably find a half dozen or a dozen different companies, some of which might have websites that say “masseyhallticketoffice.com” but have absolutely nothing to do with us. As was the case with that Blue Rodeo example or the Toronto Children's Chorus example, you end up with scenarios where people are taking actions that they believe to be legitimate, safe and transparent and are finding out that's not the case.
Rather than trying to enforce legislation that would track down those people and prosecute them, because we know that law enforcement has more important things to do, we think the easiest way and the cleanest and most efficient path forward is simply to educate the public on what safe practices are and help them identify the unscrupulous actors that are out there.
